Risk
What are the five steps of Methods to Manage Risk
-Avoidance
-Retention
-Sharing
-Reduction
-Transfer
To minimize fraud and promote pubic policy.
What is Accidental
The agreement that is created by the party and presented to the second party, to accept or decline.
Contract of Adhesion
Specific authority that may be either written or verbal.
Express Authority
Found in a contract are interpreted against the party that wrote the contract. Favors the customer, best known as contract of adhesion.
What is Ambiguities
The type of exposure that has two possible outcomes; loss or no loss.
Pure Risk
In nature so an insurer is not financially ruined.
What is Not Be Catastrophic
An agreement that depends upon particular act by the insured/claimant.
Conditional Contracts
The authority the public perceives the producer to have based upon the producers actions? Carrie & Kaitlyn on Billing calls.
Apparent Authority
Insurance company right to subrogate(reimburse) against third party, which because of their negligence, caused the insurance company to pay a claim.
What is Subrogation
What is Exposure?
The possibility of loss or condition of being unprotected.
To determine the time & amount of the loss.
What is Definable
An act is exchanged for a promise.
(Ex. premium payment is received in agreement that a claim will be paid for a loss)
Unilateral Contract
Refers to the lawful purpose of the contract; that is, the contract is free from illegality and consistent with public policy.
Legal Purpose
A type of misrepresentation and refers to the applicants failure to divulge facts. Generally evidence by the applicant silence or avoidance of question at time of application. An insurer may void coverage.
What is Concealment
What is Speculative Risk?
The type of exposure that includes the loss and no loss outcomes of pure risk, but adds a third possible outcome, that may financially gain.
What is Predictable?
The probability of the loss must be predictable to competitively set rates.
Personal agreement that require the highest level of good faith.
Personal Contract
The authority that is not specifically defined in the producers agreement, but is an extension of a producers standard duties.
Implied
What is a voluntary relinquishment of known right?
Waiver
The five steps of Management risks?
2. Examine alternative risk management techniques
3. Select the best risk reduction techniques
4. Implement the techniques
5. Monitor the plan
What is Create Financial Hardship?
The loss must be large enough to create financial hardship or no one will buy.
An insured may receive more compensation than what they applied in premium payment.
Aleatory Contract
Refers to legal capacity, that is, neither party is restricted by minority(age 18) or insanity.
Competent Parties
What are the three types of warranties?
-Continuing or Promising
-Implied